QUESTION The government of Greenland Republic protects its newly privatized firms from foreign competition by imposing stringent barriers to international trade and foreign direct investment. As a result of this, the newly privatized firms will: A. continue acting like state monopolies. B. operate at their maximum efficiency. C. pay huge taxes. D. import raw materials […]
QUESTION How does privatization help stimulate gains in economic efficiency? A. It allows newly privatized firms to gain monopoly position in a particular industry. B. It provides incentives to new private owners to search for increases in productivity and to enter new markets. C. It encourages state control over price and production output. D. It […]
QUESTION The absence of a legal system that protects property rights and the lack of machinery to enforce that system in a market economy usually results in: A. an improvement in the operating efficiency of newly privatized firms. B. reduced barriers to foreign direct investment and international trade. C. an increase in the incentives to […]
QUESTION Economic advances in many countries have led to the: A. decline of middle and working classes. B. rise of totalitarian reforms. C. decline of property rights. D. emergence of closed and self-contained societies. E. emergence of increasingly prosperous middle and working classes. ANSWER E In many countries economic advances have led to the […]
QUESTION In the Republic of Lantharia, the state-owned telephone company enjoys a monopoly. The government of Lantharia Republic wants to maximize the operating efficiency of this company by privatizing it. Which of the following is most likely to help the government succeed in this endeavor? A. Imposing high corporate taxes on the company immediately after […]
QUESTION Which of the following statements is true about the late influential political scientist Samuel Huntington’s vision of the new world? A. Samuel Huntington maintained that as societies continue modernizing they will also become more Western. B. Samuel Huntington theorized that modernization in non-Western societies can result in a retreat toward the traditional. C. Samuel […]
QUESTION Which of the following statements is true about the global changes in political and economic systems? A. The West lost the Cold War, and East European communist ideology is now widespread. B. A lack of deregulation has been the cause for the global financial crisis of 2008-2009, and the recession that followed. C. It […]
QUESTION People in the West tend to associate which of the following with a free market system, strong property rights protection, and economic progress? A. Anarchist state B. Representative democracy C. Planned economy D. Communist state E. Command economy ANSWER B People in the West tend to associate a representative democracy with a market […]
QUESTION The influential economist Jeffrey Sachs argues that throughout history, which of the following, with their long engagements in international trade, have been the most supportive of market institutions. A. Mountainous states B. Tropical regions C. Military societies D. Landlocked states E. Coastal states ANSWER E The influential economist Jeffrey Sachs argues that throughout […]
QUESTION The belief that geography can influence economic policy, and hence economic growth rates, goes back to: A. Adam Smith. B. Amartya Sen. C. Plato. D. Aristotle. E. Karl Marx. ANSWER A While a country’s political and economic systems are probably the big engine driving its rate of economic development, other factors are also […]
